MUMBAI: Artificial intelligence, which is quickly gaining stride in India and making its approach into each different sector, has additionally develop into a scorching wager for enterprise capital funds.
These funds are allocating a better share of funding {dollars} for AI startups. The utilization of AI as a tech instrument shouldn’t be new however why it’s piquing investor curiosity is as a result of its use instances are increasing – in India, as an illustration, founders at the moment are wanting past enterprise tech to construct AI-led options for customers. Naman Lahoty, associate at Stellaris Venture Partnersstated that the agency will double down on AI investments this 12 months. “Most of the tech pitches we see these days are from AI startups. But what is most encouraging is that we have started seeing a lot of AI-first businesses building for consumers as well. We are seeing AI companies building in content, gaming, astrology, health and other spaces. They are offering hyper-personalised experiences in local languages at affordable prices,” Lahoty told TOI.
Lightspeed has invested over $2 billion across more than 100 companies globally over the past year and the trend will continue in 2025 as well, said Hemant Mohapatra, partner at the VC firm which has backed companies like Qure AI, Zepto and PhysicsWallah. The number of pure play AI startups (those building core AI foundational models) in India are not many as of today – estimates suggest there could be around a few thousand of them but the ecosystem will grow. “The AI answer could be very a lot depending on good technical sources which isn’t a difficulty in India. The nation typically will likely be a giant contributor in AI house, be it pure play or as a part of different product or options providing,” said Anil. Joshi, managing partner at Unicorn India Ventures, about 40% of whose portfolio companies are building in the AI space.
Bhavish Aggarwal’s Krutrim AI, which is already valued at $1 billion and Peak XV Partners-backed Sarvam AI, are among Indian startups that are building AI models. AI startups (includes pure play AI companies as well as startups with strong AI use cases) have raised $1.2 billion in funding from investors last year, data sourced from market research firm Venture Intelligence showed.
AI remains in the innovation phase in India and will continue to dominate startup funding in 2025, said Gaurav Kothari, principal at Prosus. “AI firms which have demonstrated robust traction and clear indicators of product market match will appeal to vital development capital,” he said. Sandeep Murthy, MD at Lightbox India Advisors, said that it would be keen on investing in consumer tech startups which are using AI effectively. “We consider tech centered funds backing enterprise tech, SaaS fashions will see AI because the centrepiece of their funding thesis in 2025,” stated Murthy.
